Learn How to Choose the Right Credit Card to Use on Your Holiday Shopping
It is a very known fact that come the holiday season, everybody starts to make their holiday lists so as to avoid buying unnecessary things and stay within budget, otherwise risking increasing their debt dramatically and being forced to apply for personal loans in order to get rid of those debts. All of this is important of course, but due to the season being so busy and full of shopping, most people forget about a very important factor: The checkout and the credit card they use for it.
While most people won’t even think about it twice, choosing the wrong credit card when doing your shopping can severely harm your finances and force to to acquire a personal loan. Some of the important factors to consider when you go shopping for holiday gifts with your credit card are cash back, card benefits you might have have never used and such. That said, here are the three most important factors to consider when choosing to use a credit card for your holiday shopping.
1. Look Out for Extended Warranty Benefits:
Many credit cards on the market offer extended warranties for all or most of your purchases. What many people fail to grasp though, is that oftentimes this offer is far better than what retail stores provide with their own cards, like the Best Buy card and such. For example, purchasing a TV with an American Express card automatically doubles the manufacturer’s warranty term up to another full year. Everything for free. If you instead choose to buy using the retailer’s own card, then if your device malfunctions after its original warranty expires, you will have to either pay extra for that added warranty or to get a personal loan to get a new device.
Similar extended warranty protection terms are offered for Premium customers of MasterCard and Visa credit cards. When it comes to MasterCard, any original warranty of your purchases will be extended to an additional year. Visa credit cards offer a very similar coverage to that of AmEx, with the sole exception that the only eligible items and devices are those with warranties shorter than three years time.
2. Points and Cash Back:
Without a doubt the best way to save as much as possible whenever you purchase something by making sure to get the most reward points or cash back from your transaction as possible. If you happen to have just one or two credit cards it is fairly easy to know which one gives you the most back and just use that one. If however, you use several cards, then you should take some moments to verify which of them offer you the best benefits in terms of rewards.
Also consider that there are some credit cards that can be tricky in this respect, such as Discover, which offers a rotational cash back program that applies depending on when you use your card. For example, with Discover, there was a percent cash back bonus available both online and at department stores only from October through December of last year. This year though, the categories will switch to restaurants and movies. So you always need to be up to date with these changes in order to be able to take advantage of them.
3. Always Beware of Cards from Department Stores:
Department stores are very convincing when it comes to selling you their cards, they usually offer between 15 or 20 percent off your purchases just for you to sign up. However, don’t forget that because you apply for your credit card your credit score will be affected negatively due to the hard inquiry it receives on the part of the department store.
That might not sound like much, but if in the near future you plan on getting a car, a house or a personal loan, that small hit on your credit score can trigger an increase on the interest rate you pay for that personal loan. Add up those extra points on your interest rate that you will have to still pay for months and you will then see that your original savings with the department store’s cards don’t look that tempting anymore.
If you really want to take advantage of some promotions and offers with your credit card, look for better deals that are clear from the start.
And don’t forget, read everything beforehand and only get and use those cards that really bring you benefits in both the short and long terms.